Thailand has 52 million internet users and is expected to reach 61 million by 2025. And the country’s ecommerce market is expected to scale up to another level as many consumers are already shopping through social commerce, and brands are coming up with creative activities to engage with potential customers.
TechNode Global gathered three industry experts at its fourth episode of the Tech Insights Webinar Series on August 26, for a discussion on Thailand’s digital economy. Nuttaporn Chanchokpong, digital storyteller at True Digital Park and moderator for the panel, began the talk by asking, “How is the social commerce landscape like in Thailand?”
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The Thai pot of gold undiscovered
The online shopping market constitutes a measly 5% of the whole retail spending in Thailand, as compared to a substantial 35% in China, said Boonchai Limatibul, founder of Thailand-based social commerce startup Moomall. Social commerce–selling a product or service directly through social media networks–accounts for 40%, the largest percentage in the world, of ecommerce transactions in Thailand.
There isn’t an established social commerce platform in Southeast Asia. Unlike China where social commerce is the fastest-growing segment within its mature ecommerce market with popular platforms such as Pinduoduo, Yunji, Beidian and Xiaohongshu, he added. “Facebook is the most commonly used social commerce platform across Southeast Asia, with varying alternatives in different countries. Line app is another preferred platform in Thailand, while Whatsapp is another popular choice in Indonesia,” said Limatibul.
There is a huge untapped potential in Thailand’s digital economy which will be a magnet to draw investments as the saturated market in China is now driving Chinese venture capitalists to look and invest beyond the country’s borders, he added.
Covid-19 is affecting many ecommerce businesses and how consumers shop. Limatibul said he has gotten the long end of the stick as the virus led to an upturn for an online business like Moomall.
Molding the shovel
Eyeing a slice of this pie, Alibaba Cloud has pumped gobs of money and done many investments in the fundamental infrastructure in Southeast Asia, said Tyler Qiu, Alibaba Cloud’s Thailand country manager. “Alibaba Cloud currently has more infrastructure than any other provider in Thailand, with a network node and nine Content Delivery Networks (CDN) in the country,” he added.
The infrastructural changes in Thailand across the years has brought many positive impacts, said Limatibul. “We are now seeing easier payment with the removal of transaction fees and convenience of e-wallets, quality logistics in the face of tighter competition, and greater investments from Chinese investors,” he added.
With stronger infrastructure, Thailand is seeing an increase in consumers, especially the older generation, being drawn to online purchases. “Interestingly, the average age of customers on Moomall is 44 years old, which is very high,” Limatibul added.
No wasted resources
Customer acquisition is critical to running a growing and sustainable business, especially for a relatively young business that has yet to build broad awareness and a loyal following.
Moomall attracted more than 100,000 users since its app’s launch four months ago. According to Limatibul, the platform uses network marketing as a distribution method of the marketing fee. “The multi-level marketing model with a cashback principle makes it possible for a customer to receive a rebate sum that is greater than his/her initial purchase,” he said.
A performance-based ad expenditure scheme, where formulated ad spending is proportional to revenue generated, will definitely attract businesses, said Limatibul.
To ensure no resources are wasted, more companies are subscribing to the pay-as-you-go method as users only pay for services procured. The ability to scale cloud resources upwards or downwards based on existing needs is an essential part of helping your business to sustain and grow. “Startups worry about the infrastructure costs whereas growing companies worry about the major issues and increasingly higher costs caused by the growth itself,” said Qiu.
Alibaba Cloud offers a pay-as-you-go model for businesses to scale their servers and network elastically, he added. “Covering all grounds from latency to cybertech, and providing a seamless experience for online businesses to grow.”
All sunshine and rainbows?
However, it’s not all sunshine and rainbows as barriers still exist for the commerce landscape in Thailand to move away from their favourite “cfcf” call. “The social shopping experience in Thailand is pretty outdated,” said Limatibul. “Most Thai online shoppers during a Facebook livestream will place orders by leaving a ‘cfcf’ comment, followed by making payment via a bank transfer, and sending the payment slip on Facebook messenger.”
Notwithstanding the barriers, Limatibul said that ecommerce has a bright future in Thailand. When asked about where online shopping in Thailand is heading next, Limatibul noted a trend of experiential stores popping up in China, which could possibly indicate a gradual shift in building an offline experience for customers in Southeast Asia.
Qiu echoed Limatibul’s view that this “new retail” is a new trend that will happen in Thailand within two years as online shopping lacks the sensory experience. “The core of new retail is the combination of online shopping’s convenience and data with the offline shopping experience,” he added.
About the panellists:
Boonchai Limatibul, founder, Moomall
After graduating from Tsinghua University’s MBA program, Boonchai Limatibul founded RIYA Furniture, and later opened an online store in Taobao. He focused his talents on helping famous Thai brands enter China’s leading cross-border ecommerce marketplaces, such as Tmall, JD, VIPShop, Red and Kaola. From partnerships with SNAILWHITE, a top Thai cosmetics brand, to 24Shopping, CP All’s online subsidiary, Boonchai built the chief cross-border trading business that enabled Thai cosmetics brands to become successful in China.
Tyler Qiu, country manager, Alibaba Cloud Thailand
Established in September 2009, Alibaba Cloud develops highly scalable cloud computing and data management services providing large and small businesses, financial institutions, governments and other organisations with flexible, cost-effective solutions to meet their networking and information needs. A business of Alibaba Group, one of the world’s largest ecommerce companies,which Tyler Qiu joined in 2014, Alibaba Cloud operates the network that powers Alibaba Group’s extensive online and mobile commerce ecosystem and sells a comprehensive suite of cloud computing services to support sellers and other third-party entities participating in this ecosystem.
Nuttaporn Chanchokpong, digital storyteller, True Digital Park
Nuttaporn Chanchokpong started her career in news writing and reporting, and later became Thailand’s Chief Editor for The Asian Parent — the number one parenting publication in Asia with over 5 million users per month. Being among the first movers toward the digital age, she is an avid user of numerous digital tools and is now applying content skills on digital marketing at True Digital Park.